5 ways to vastly improve invoice processing workflows
The source of the most time-consuming, repetitive administration work in most businesses is finance ops. Traditionally, this is an area which is bogged down in fragmented and inefficient processes. This takes up an undue amount of time for service teams, which could be better spent on higher-value work.
As the current wave of digital transformation reshapes the way we work, this is slowly changing, but unless your process is as good to begin with, improvements will be difficult. One area that is most in need of improving is invoice processing. Invoices are a fundamental responsibility of any business’s financial operations and the process typically follows this sequence:
- Invoice received
- Invoice scanned (if applicable)
- Data captured
- Data validated
- Approval workflow
- Payment authorized
- Payment sent
- Record keeping and archiving
Often handled manually, prone to errors, and frequently subject to delays, invoice processing can be vastly improved with orchestration and automation. We’re going to explore the main challenges inherent in invoice processing and five key ways in which it can be improved.
The major challenges faced in traditional invoice processing
These are the main culprits for slow and inefficient invoice procedures.
1. Manual data entry
Without workflow management in place, many companies are still processing invoices manually and that makes it a resource-intensive task. The information from paper invoices is input into the accounting system which takes time and can even risk some invoices being lost under other piles of paperwork. Digitizing the procedure with workflow management addresses all these issues.
2. Delays and inefficiencies
Companies that are still reliant upon paper-based invoices often have lengthy processing times. Invoices take a long time to make their way to the right person and then the procedure is disjointed and slow, often getting held up at multiple stages. An invoice often passes through various hands or systems before payment is finally made. This can lead to late payments which can place a strain on supplier relationships. Workflow management orchestrates the entire process from beginning to end, making it quicker and allowing any delays to be swiftly dealt with.
3. Human errors
People make mistakes. When invoices are being handled manually they are susceptible to human error and that can have financial repercussions. Incorrect invoice data can lead to, accidental overpayments, compliance issues, or missed payments. Automating invoice processing with a workflow management solution minimizes these errors and notifies the right people quickly in the event of an exception.
4. Lack of visibility
The usual methods make it difficult to track the status of invoices as they go through all the processing steps. So when invoices get delayed, say because they’re waiting for approval, it may take a while to realize there’s a problem. Bottlenecks and confusion are rife and improving the process is an uphill struggle. Workflow management provides X-ray vision into the process so invoices are easy to track and any issues can be handled in a timely manner.
5. High processing costs
When it takes so long to process invoices and the risk for mistakes is so high, the natural consequence is a financial drain on the company’s resources. The amount of time employees spend on invoicing prevents them from focusing on their core duties, which represents a poor use of resources. By automating invoice processing with HR workflow management businesses can save both time and money.
5 ways to vastly improve your invoice processing workflows
If you’re ready to transform your invoice procedures, read on.
1. Implement electronic invoicing
Electronic invoicing is the first step towards modernizing your invoice processing workflow. E-invoicing automates the delivery and receipt of invoices into a standardized digital format. This reduces the need for manual entry, speeds up processing times and greatly improves accuracy.
2. Utilize optical character recognition (OCR)
Adopting OCR technology can optimize your invoice procedures even further. This software automatically extracts the data from scanned or digital invoices so it no longer needs to be input manually. Once again, this expedites processing time and significantly reduces mistakes.
3. Implement workflow orchestration
Workflow orchestration effectively streamlines the entire invoice processing journey from start to finish. Routine and repetitive steps can be fully automated, invoices are routed to the right people for approval, and reminders are automatically sent when an invoice is overdue. Plus, built-in reporting facilitates clearer visibility into the process. Everything runs more smoothly and the error count drops drastically.
4. Leverage artificial intelligence (AI)
There is an influx of AI-powered solutions arriving to address an array of needs and that includes invoice processing. Tools like Enate’s built-in AI solution can perform advanced data validation and anomaly detection. So when invoices deviate from the norm, a human worker is immediately notified to review it further. This helps ensure fraudulent invoices are caught and compliance issues are avoided.
5. Integrate with accounting software
To truly streamline invoice procedures it’s essential to ensure your legacy systems and invoice workflow software are all synchronized and working together seamlessly. Adopting a workflow solution that wraps around the current tech stack is the easiest way to achieve this. With everything fully integrated, financial data is recorded accurately, nothing gets missed, and improved financial reporting supports better decision-making.
Upgrade your invoice processing today
Enate’s end-to-end workflow platform orchestrates invoice processing from start to finish. Fragmented procedures are brought together in one system for optimum efficiency, minimized mistakes, and crystal-clear visibility into operations. Technology agnostic, Enate can integrate seamlessly with your existing systems and automate repetitive tasks to give time back to your team.
Operational Soup is a term we use when work is being carried out, but businesses have little idea how much, by whom or exactly how it is processed.
Start orchestration in departments with strong use-cases to deliver value quickly. Often, good examples can be found in back/middle office process areas that have high variation and complexity such as finance or HR operations. Recent intelligence sourced through process mining suggests 80%+ of the work performed in a shared services organization is not performed in the ERP systems, but rather in Excel or Outlook. This is where Orchestration thrives.
Having orchestration implemented across our departments can be likened to having x-ray vision into your operations.
Global Head of Operations at TMF
Almost half of banking and investment CIOs (49%) and insurance CIOs (44%) indicated that they will increase their automation investments in 2021.
Source: Gartner, 2021